Good evening everyone! Its my absolute pleasure to discover this forum and share my thoughts here. Im an independent filmmaker who has produced and directed couple of award winning and multiple festival screening short films and one documentary. Infact my second short film also got a distribution here in the US. I made these films couple of years ago and since then have been working in corporate world in an unrelated field. Since quite some time I had been planning to find ways to make my real passion as profession. As we all know, its tough!
I have plans of making an independent feature film soon, but im not expecting that to turn into any windfall as most indies lose money! Recently I decided to go part time in my alternate career and put some of the money I have earned over the last few years in starting a video production business which will have some decent cameras, lenses, post production studio etc etc. Looking at some existing similar businesses, I estimated total investment to be around 50-75k which included 4-6 small to medium end cameras, high end lenses, solid lighting equipment, microphones, sound design softwares, couple of editing workstations and other miscellaneous stuff.
So, here is my plan-

1. Rent a small office space in an inexpensive semi commercial area where I can put equipment and have decent space for post production work, including mini interview shoots, green screen etc.

2. Immediately start making some revenue for the company by renting out equipment, post production equipment and studio space to independent filmmakers, documentary filmmakers, political marketing companies, etc etc

3. Start producing and developing work for corporate clients, educational clients, events etc. Ofcourse this will take some time to take off, I assume

4. Develop a team of other technical people-DOP's, sound designers, editors and animators etc and hire them on project basis; hire a part time administrative assistant to help in scheduling, answering calls etc

Btw, forgot to mention, I plan to start this business somewhere around greater washington DC metro area-northern virginia/baltimore area.

My long term plan is to hone my both creative and technical skills through the projects I will do through my production company, develop a network of creative people and eventually make my indie feature film using most of resources from the company (both equipment and talent wise)
I would like you experienced guys to give your two cents on following points-

1. How does the overall plan sound in the context of current climate of video production business and is there anything important Im missing here?

2. What kind of cameras and other equipment you guys advice on investing in keeping in mind the current advancements in technology and future?

3. Is there anything else I can add in my planned list of equipment rental/services offered which has lot of demand nowadays. I mean may be something like media conversion from one format to another or perhaps something else?

It seems the new standard is 4K, so you'd probably want to make sure your cameras record in 4K.

As far as the scale of all of this, you might want to start even smaller than you have in mind. Any idiot college kid with a camera can compete. You would probably want to start with two cameras, some lighting gear, some sound gear, and an editing computer, all located in your garage. From there you can build a portfolio of professional advertising type work and grow.

What sort of work do you want to do in the first 12 months? What sort of clients do you anticipate you will be able to get in the first 12 months? How achievable and how compatible are those two questions? What do you realistically expect you will be able to do in terms of the level of work in the first 6-12 months?

Renting out equipment and space is not an easy money maker, and takes a huge amount of initial capital. Unless you're going to be investing in Alexas and top of the line equipment and suites (which you won't be able to on even 75k) you'll be lucky to even make your money back in 24 months.

Renting out equipment and space should be a supplemental money stream, not a main source of income unless that's specifically the business you want to get into and you can afford to do it properly.

My suggestion would be start small. Start at home, build up some clients and re-invest all the money you make into your business. I know sometimes we need to take risks, but spending $75k up-front seems like an unnecessary risk. Buy one camera and some basics for now. Spend $5-10k. Build up a few recurring clients who can sustain you. Then expand. That way you get to test the market. No use spending $75k on equipment and gear and finding you can only get a handful of clients whose budgets are no higher than $400/video and the people who want to hire your facilities can only afford $50/day...

Why don't you market yourself as a director instead of a full service production company, and then, said production companies can hire you? No overhead!

Specialize in something. Ex: Shoot a commercial reel with a couple spec commercials, like a fake Ford or iPhone commercial, etc. to get into commercial direction. Big money in commercial direction! Then, prod companies hire you, instead of you having to create one. Just an idea! Good luck!

Thanks everyone for your wonderful responses! I will reply one by one-

@All-Star Productions - Thanks so much! I agree 100% with you. The estimate I had given earlier was for an existing full fledged similar business. Ofcourse as a start up, I wont get everything right away. Any suggestions on specific cameras and other stuff?

@jax_rox- Thanks so much! Well, you raise very pertinent points. I think a very small investment might not be helpful for the goal I have, although completely agree with you that rental income is going to be only supplemental-which is fine with me. Also, as mentioned to earlier poster, I agree that no point investing 75k right away. But i do want to give the company a professional look and pitch it more than average joe with a camara. Otherwise if you only operate from a garage with minimal equipment, you are competing with 100's of, if not more, videographers and editors in your area. Btw, when you mention that pure rental business could work, what kind of minimum investment you would imagine for that?

@WalterB- Thanks for your input. Yes, Im not very far from what jax is saying. I do have some network in DC area where I could start with, but Im aware of the time and effort it will need to even secure first few clients. Im up for the challenge.

@indietalk- Thanks so much for your response. Hmmm..well I see your point, and will ponder more over it. I dont have any experience with commercials, but if you look at some of my work, you may think I have a talent for that. But isnt that business already very competitive and hard to break into?
@directorik- Thanks so much! To answer your questionsis there an immediate need for those services? Are
there not enough equipment rental places in that area? Will you
have enough equipment or is your plan to rent out one kit at a
time? Is there a need for studio space in your area?

Honestly i dont know how much need is really there. I do see few rental companies, but not much. Im planning to buy atleast 2-3 cameras, some high end lenses and lighting equipment and few other things to start with.
As for your last question in terms of exp of doing a business, I do have business degree and have been running a consulting business since few years. Although im not sure how much will the insurance cost for such kind of businesses. My S corp is already in place and i have EIN number too.

Once again thanks so much to everyone and please chip in with more thoughts. Im all ears!

I do want to give the company a professional look and pitch it more than average joe with a camara. Otherwise if you only operate from a garage with minimal equipment, you are competing with 100's of, if not more, videographers and editors in your area.

Again I ask, what sort of clients do you anticipate you'll be working with? When you're out on set, or have clients who don't supervise the edit, how does having a fancy office set you apart, other than increasing your overheads?

Of course, you definitely want to pitch it more than an 'average Joe' but in my opinion the biggest way you can do that is through the quality of your work.

Quote:

Originally Posted by DEVINDER83

when you mention that pure rental business could work, what kind of minimum investment you would imagine for that?

Depends. Your profile says you're in New York, so is that incorrect, or will you be moving to start this business? How much knowledge do you have of the local industry...?

I don't know the markets you're talking about, so I can't realistically give you an idea of what competition there is in terms of rentals, what sort of productions are shooting and what sort of needs they have. You'd need to research that pretty heavily and also find the hole in the market. No point investing in five Alexas if there's already four rental houses with a bunch of Alexas. Alternately, there may be one rental house with an Alexa that has so much demand they can't keep up, in which case it might be worth investing in one - for example.

Quote:

Originally Posted by DEVINDER83

Honestly i dont know how much need is really there. I do see few rental companies, but not much.

My suggestion is to write up a comprehensive business plan and really research competition, client leads, rental houses etc. etc. especially if you're planning on a major outlay, but even if you're not planning to spend any money business plans are vital and extremely helpful.

Quote:

Originally Posted by DEVINDER83

Im planning to buy atleast 2-3 cameras, some high end lenses and lighting equipment and few other things to start with.

I keep coming back to it but how will you know if this will be adequate enough if you don't know what sort of clients you'll be getting, what sort of work you'll be doing, and what sort of work is out there available to you? 3 cameras seems like a fair outlay if you're going to be working mostly solo in the beginning. How many jobs would you have where you'll absolutely need more than one camera? Is it enough to justify purchasing extra cameras, rather than simply hiring them? At what point do you decide that it's worth investing in a second (or third) camera rather than hiring every time. Where will you source second and third camera operators from? What sort of lighting equipment, exactly, will you need (i.e. will you need an interview kit that you can rent to expand on for bigger jobs, or are you going to be making branded short films where you might need totally different types of lights and light modifiers?), where will you get the crew to help you with lighting? What will you charge? What do you need to make to both cover your costs and pay yourself a wage?
This should all be covered in your business plan, by the way.

I can rent a full Alexa Mini kit + a small set of Cooke Mini S4's for ~$1,500/day. To buy the entire rental kit new (including all accessories, batteries, head and legs, follow focus, matte box etc.) would edge you up into the $150-200k range.
There are many people who can justify that cost with the type and amount of work they get, particularly if supplemented by rental income. But it wouldn't make sense to go out and invest that much money on the hope that you'll get the work to not only pay it off, but cover your other expenses and still be able to draw even a small wage.

If you know that you're going to get enough work to be able to do all that, then by all means.

@indietalk- Thanks so much for your response. Hmmm..well I see your point, and will ponder more over it. I dont have any experience with commercials, but if you look at some of my work, you may think I have a talent for that. But isnt that business already very competitive and hard to break into?

Im overwhelmed with the replies. I cannot reply to each point, but will try to summarize my take on the points raised and questions asked.
I believe some of you missed/forgot couple of points I mentioned in the first post itself. Im not going full fledged into the business as I mentioned I'm still keeping my day job-although going more part time. This will ensure that Im covered to an extent even if I have no income for 6 months! Yes, there is a risk. No one has the resources and the time to do in depth research on the current local market. It will take months and months plus resources to know the exact answers to the questions some of you are asking here. So, do I spend time in that or do something which i like doing-with some amount of risk? I will go with the latter. Because even if I find that market is bad and there is not much demand for these services, should I just give up because of that or spend another 6 months trying to find another market which might work? Its not that im trying to evaluate the best business which should succeed for sure. Im trying to do what I like doing and find the least risky method of doing it. I might lose money, but at the very worst I will get better in the craft.
Still, to answer some of the questions, Im in the process of doing intermediate research on all the existing production companies in the area in terms of how much equipment they have, what are their rental prices, who are their clients etc etc. But again, there is no way im going to get beyond the tip of iceberg with that. There is going to be a huge element of uncertainty and risk with my venture.
When i made my first short film, I was coming from blank zero with just few film classes and workshops behind my back and lot of people thought Im crazy making a film with that background. In the end, it turned out pretty well and most people wouldnt believe that it was my first film and i had never worked on a film set before.
Look Im not trying to undermine any of the responses here-infact I appreciate each one very much-its been lot of learning. I believe lot of times in life you have to take decisions based on existing ground realities, some research, your gut feeling and leave the rest to nature. If we always wait for perfect circumstances, we will keep waiting.
In the comments, there is lot of talk about finding out the exact demand in the area. That reminded me of an anecdote our business school professor used to talk about-

Scenario 1- There are 10 barber shops in an area.
Entrepreneur A- Oh, there is no point of having 11th one, market is already saturated
Entrepreneur B - Wow! This means there is lot of demand for this service, if 10 can survive, so will the 11th one!

Scenario 2- There are zero barber shops in an area.
Entrepreneur A- Oh, there is no point of opening a barber shop here. Clearly there is no demand!
Entrepreneur B - Wow! This means there is an opportunity here which no one has tapped yet! Let me open the first one!

Now which entrepreneur is right or wrong, that's a matter of debate, but I will go with the B one.

Finally, to answer the concern that a better service and quality of work is more important than a fancy office with a receptionist. Yes, I agree. But you first need few clients before you can give that quality and that office will help in bringing atleast some of those first clients.

In the end, I will mostly go with what @all_star productions said and would appreciate if you guys can recommend any specific cameras and other equipment gear which will serve my goals.

Sorry if I missed answering any of your questions or concerns raised. Its hard for me to keep track of every point raised. I will be happy to answer them.

No one has the resources and the time to do in depth research on the current local market.

Sure you do. That's part of starting and running a business. You have to be across who your competition is and what kind of work is out there always. Running a business isn't just about getting to do the 'fun stuff'. There's a whole host of 'boring stuff' to do - like research. Even as a freelancer. I hate doing the boring stuff, but it comes with the territory.

You don't have to go into so much detail that it becomes ridiculous, but you should be able to do enough to figure out where you might sit in the marketplace without putting too much strain on yourself.

Quote:

Originally Posted by DEVINDER83

It will take months and months plus resources to know the exact answers to the questions some of you are asking here. So, do I spend time in that or do something which i like doing-with some amount of risk? I will go with the latter.

Unless you do some research, it's all risk, not just some. Yes, it might take a while to scope out a market. If you don't like doing those kinds of jobs, I highly recommend against starting a business and investing a whole bunch of your own capital in it.

Find a few local freelancers and talk to them about their experience. Even that helps.

Quote:

Originally Posted by DEVINDER83

Because even if I find that market is bad and there is not much demand for these services, should I just give up because of that or spend another 6 months trying to find another market which might work?

If there's not much demand for the services you want to offer, how will you be able to sustain even 6 months worth of rent on your office? Let alone staff wages?

Quote:

Originally Posted by DEVINDER83

Im trying to do what I like doing and find the least risky method of doing it.

Seems to me like the least risky method is to not invest tens of thousands of dollars into an unnecessary office....

Quote:

Originally Posted by DEVINDER83

I might lose money, but at the very worst I will get better in the craft.

If your goal is to get better at making films, then I would suggest making films is a better use of your time and money. If your goal is to get better at running a business, or to run a business in the film industry, then sure - but it sounds like you want to be making stuff, not running the business side.

Quote:

Originally Posted by DEVINDER83

If we always wait for perfect circumstances, we will keep waiting.

I'm not suggesting waiting for perfect circumstances. I'm suggesting examining the market by working from home where your overheads are much lower and when you're in a position to expand, then you can invest in a physical location. I'm suggesting at least finding out a little about the market and putting together a realistic budget and business plan at least before spending a lot of your own capital on an office fit out.

If you worked from home and made a whole bunch of great stuff that you were really happy with and were able to take a nice salary from the work but were never in a position to get a physical office location would you still be happy?

Quote:

Originally Posted by DEVINDER83

That reminded me of an anecdote our business school professor used to talk about-

Scenario 1- There are 10 barber shops in an area.
Entrepreneur A- Oh, there is no point of having 11th one, market is already saturated
Entrepreneur B - Wow! This means there is lot of demand for this service, if 10 can survive, so will the 11th one!

Scenario 2- There are zero barber shops in an area.
Entrepreneur A- Oh, there is no point of opening a barber shop here. Clearly there is no demand!
Entrepreneur B - Wow! This means there is an opportunity here which no one has tapped yet! Let me open the first one!

Now which entrepreneur is right or wrong, that's a matter of debate, but I will go with the B one.

The hypothetical is flawed. It makes sweeping assumptions about demand for services that aren't really reflective of the real world. There may only be 10 barber shops in one area because there are only enough men in the town who frequent barber shops to service ten barber shops. That town may have had a procession of people through trying to make an 11th one work, but the fact would remain that until there are more men in the town, only ten can survive. It's not that hard to find out things like that and help you make a better educated guess as to what's going to work.

Maybe all 10 barbershops are so busy they have to turn people away. Then you know you have a good chance of having a successful enterprise. But unless you look into it a little, how will you know? What if instead of a barbershop, we were talking about a VHS rental store in scenario 2?

Maybe there'd demand for a barbershop with a particular niche. Maybe your production company specialises in sports. Or aerial. Or commercials. Because you've realised there's a gap in the market for that kind of work. I can tell you an anecdote of a friend of mine who was almost broke after attempting to make a gear rental and production house work. About four years ago he saw a gap in the market for aerial work. Now he shoots aerial photography for every major TVC and every big budget feature film that shoots locally. He makes stupid amounts of money.

He was neither Entrepreneur A or Entrepreneur B. He was Entrepreneur C, who spent a little bit of time finding the gap in the market and researching the kind of demand for it. That's what made him successful. It was being Entrepreneur B that got him into the original situation

Quote:

Originally Posted by DEVINDER83

Finally, to answer the concern that a better service and quality of work is more important than a fancy office with a receptionist. Yes, I agree. But you first need few clients before you can give that quality and that office will help in bringing atleast some of those first clients.

Why can't you deliver top quality to client number one? Why do you need an office to start working? Or to start getting or looking for work? You never answered my question about whether or not you're moving, but what's stopping you from going out there today and finding a new client?

How much of your budget have you put aside for the fit-out of your office? Or are you going to bring clients around to a mostly empty room that has a couple chairs and some equipment in the corner and hope that impresses them...?

Quote:

Originally Posted by DEVINDER83

In the end, I [...] would appreciate if you guys can recommend any specific cameras and other equipment gear which will serve my goals.

As I've said, I would need to know the type of work you plan on doing and what budget you have set aside for camera equipment before I can make any suggestions. Otherwise, you may as well ask what the coolest camera you can get for $xx is.

You seem very set on having multiple cameras - kitting out 3x FS5s could easily cost you $30k+ which is a hefty chunk of your budget. Kitting out three GH5s could cost you $15k which is also a hefty chunk of your budget. If you need to shoot sports, you're going to have different requirements to shooting branded short films. If you're shooting events, you have different requirements to docos. If you're going to be doing a lot of high-end TVCs with VFX work, you're going to have different needs again.

I can't suggest much without knowing some of the specific details, at least of what you anticipate to be the case...

Buddy, you seem to have lot of time finding chinks in my arguments rather than providing any real value to what im trying to achieve here. I have answered enough and your sarcasm is of no value or of interest to me.
I have been "running a successful' business already for your information, but GOD knows what you are doing on a friday night spending all your energy in just proving you are right.
Im done with you here and please with all your 'trying to help' comments, spare me.
I got your point!